Novelion Therapeutics
Inc. (NASDAQ:NVLN), a biopharmaceutical company
dedicated to developing new standards of care for individuals
living with rare metabolic diseases, today announced that
subsidiary Aegerion Pharmaceuticals, Inc. has entered into a new
secured financing facility with affiliates of Sarissa Capital
Management and Broadfin Capital (the “Lenders”) providing for a $20
million term loan to Aegerion, which has been fully drawn. Aegerion
plans to use the capital to support the ongoing development of
metreleptin in additional indications and for general corporate
purposes.
Michael Price, chief financial officer of
Novelion said, “We are fortunate to have shareholders who provided
this financing that believe in the upside of the company. The
additional cash strengthens Aegerion’s balance sheet and liquidity
and allows for the continued execution of key near-term business
priorities, particularly the ongoing development of metreleptin for
additional indications, which we expect to be a meaningful future
growth driver. We continue to focus on cost control and
expense management, and we are actively
reviewing our overall capital structure with a view
toward optimizing our assets for shareholders. We have
significant flexibility in our holding structure and in our capital
structure, particularly with respect to Aegerion’s convertible
notes, and are actively working with our advisors to determine the
appropriate next steps to continue to improve our balance sheet and
drive shareholder value.”
The term loan matures at the earliest of: August
1, 2019; 30 days prior to the maturity date of Aegerion's 2.0%
convertible senior notes due August 15, 2019; upon any
restructuring or recapitalization of the convertible notes; or upon
acceleration of the obligations under the term loan agreement. The
loan accrues interest at 9.0% per annum, with all interest being
payable in kind. Aegerion’s obligations under the new facility are
secured by substantially all of its assets, including the
intellectual property rights of MYALEPT® and JUXTAPID®, subject to
customary exceptions. This lien is subordinated only to the
intercompany loan from Novelion, and is prepayable by Aegerion at
any time without penalty.
Aegerion also entered into an amended and
restated loan facility with Novelion. The loan facility
between Novelion and Aegerion was initially established in 2016 in
connection with the business combination between Novelion
(formerly, QLT Inc.) and Aegerion, and has been used to finance the
business and operations of Aegerion since the completion of the
business combination. The Novelion facility has approximately
$38.1 million in principal outstanding as of March 15, 2018,
inclusive of interest that has been capitalized, accrues interest
at 8.0% per annum, which interest is paid in kind unless otherwise
elected by Aegerion, and is secured by the same collateral that
secures the new facility with the Lenders. The Novelion
facility and related liens on Aegerion’s assets are senior to the
new facility with the Lenders.
In connection with the completion of the new
facility, the Lenders were collectively issued warrants to purchase
approximately 1.8 million common shares of Novelion. The warrants
have an exercise price equal to $4.40 per share, representing the
volume weighted average price of Novelion common shares for
the 20 trading days ending on March 14, 2018.
The new facility was unanimously approved by the
disinterested members of the board of directors of Novelion and the
Aegerion board of directors. In connection with the
negotiation and completion of the new facility, Novelion formed a
special committee of its board of directors comprised solely of
independent directors. The special committee, which
unanimously recommended the new facility to the disinterested
members of the Novelion board of directors, received advice from
legal and financial advisors.
Required Canadian
Disclosures
Broadfin is considered to be a related party of
Novelion, therefore the loan is considered to be a “related party
transaction” under applicable Canadian securities laws. The loan
and the issuance of the warrants in connection with the loan are
exempt from the formal valuation and minority shareholder approval
requirements of such Canadian securities laws.
Novelion did not file a Material Change Report
under applicable Canadian securities laws more than 21 days before
the closing of the loan given the opportunity that the loan
presented to Aegerion to expeditiously obtain such financing. In
addition, because the loan is not subject to any minority
shareholder approval, there was no other reason to delay the
advancement of loan funds to Aegerion.
About Novelion Therapeutics
Novelion Therapeutics is a biopharmaceutical
company dedicated to developing new standards of care for
individuals living with rare metabolic diseases. Novelion has a
rare disease product portfolio through its subsidiary, Aegerion
Pharmaceuticals, Inc., which includes JUXTAPID® and MYALEPT®. The
company seeks to advance its portfolio of rare disease therapies by
investing in science and clinical development.
Forward Looking Statements
Certain statements in this press release
constitute “forward-looking statements” of Novelion within the
meaning of applicable laws and regulations and constitute
“forward-looking information” within the meaning of applicable
securities laws. Any statements contained herein which do not
describe historical facts, including statements regarding the
expected benefits of the new loan, including the impact on the
Company’s position for ongoing capital structure review; the
intended use of proceeds for the new loan; beliefs that the loan
strengthens Aegerion’s balance sheet and liquidity and allows for
the continued execution on key near-term business priorities;
expectations for metreleptin, including that it will be a
meaningful future growth driver; beliefs about the Company’s
capital structure and Aegerion’s convertible notes and the ability
of the Company to drive shareholder value are forward-looking
statements which involve risks and uncertainties that could cause
actual results to differ materially from those discussed in such
forward-looking statements. Such risks and uncertainties include,
among others, risks associated with the new loan and the amendments
to the intercompany loan facility, including if the Company is not
able to realize the expected benefits of the new facility,
Aegerion’s previously disclosed criminal plea agreement and other
settlement arrangements (including the government’s recitation of
their assessment of the background of its case, the settlement
itself and publicity related to the settlement), the risk that the
government investigations and the settlement will give rise to
third party demands, claims or litigation that could materially and
adversely impact our results of operations, including demands or
claims by, or litigation with, third party payers, healthcare
providers, or patients or investors, for matters related to the
subject matter of or disclosure in connection with the
investigation or the settlement, the likelihood that the
investigation could lead to potential investigations, claims or
litigation by consumer protection agencies or groups, or provide a
basis for product liability claims or litigation and the adverse
effects the investigation and settlement could have on Aegerion’s
commercial operations and contracts, along with those risks
identified in our filings with the U.S. Securities and Exchange
Commission (the “SEC”), including under the heading “Risk Factors”
in our Annual Report on Form 10-K filed on March 30, 2017, our
Quarterly Report on Form 10-Q filed on November 9, 2017, our
Current Report on Form 8-K filed on January 31, 2018, and
subsequent filings (including our upcoming Annual Report on Form
10-K), with the SEC, available on the SEC’s website at www.sec.gov.
Any such risks and uncertainties could materially and adversely
affect our results of operations, profitability and cash flows,
which would, in turn, have a significant and adverse impact on our
stock price. We caution you not to place undue reliance on any
forward-looking statements, which speak only as of the date they
are made. Except as required by law, we undertake no
obligation to update or revise the information contained in this
press release, whether as a result of new information, future
events or circumstances or otherwise.
Investors and others should note that we
communicate with our investors and the public using our company
website www.novelion.com, including, but not limited to, company
disclosures, investor presentations and FAQs, SEC filings, press
releases, public conference call transcripts and webcast
transcripts. The information that we post on this website could be
deemed to be material information. As a result, we encourage
investors, the media and others interested to review the
information that we post there on a regular basis. The contents of
our website shall not be deemed incorporated by reference in any
filing under the Securities Act of 1933, as amended.
CONTACT:
Amanda Murphy, Director, Investor Relations & Corporate
CommunicationsNovelion
Therapeutics857-242-5024amanda.murphy@novelion.com
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